McRaith Appointed to Head Federal Insurance Office

Illinois Insurance Director Michael McRaith will head the new Federal Insurance Office (FIO). McRaith's appointment was announced by Treasury Secretary Tim Geithner at a meeting...

March 22, 2011

Illinois Insurance Director Michael McRaith will head the new Federal Insurance Office (FIO). McRaith's appointment was announced by Treasury Secretary Tim Geithner at a meeting of the Financial Stability Oversight Council (FSOC). As director of the FIO, McRaith will serve as an ex officio nonvoting member of the FSOC. McRaith will remain in his Illinois post through the end of the state's legislative session on May 31. McRaith also currently serves as the NAIC's secretary-treasurer.

The FIO was created under the Dodd-Frank financial reform law. Its responsibilities include issuing recommendations to the new FSOC, coordinating federal efforts and developing federal policy on prudential aspects of international insurance matters, administering the federal terrorism risk insurance program and determining whether state laws are pre-empted by those covered agreements.

Large insurers and financial services firms attempted to give FIO a broad mandate that could have positioned it as a precursor of federal insurance regulation; however, the NAIC succeeded in getting language in the law limiting the scope of the FIO's activities and stating that the office will have no regulatory authority. Still, the law required the FIO to conduct a study of insurance regulation - including the "potential benefits" of federal regulation - and make recommendations to Congress. PIA has called on Congress to defund the study because it cannot be unbiased, as it requires the FIO to study itself and recommend whether its own authority should be expanded.